EBRD helps develop Armenian insurance sector
Harold Doan and Associates (press release), CA
Aug 3 2005
Press Release – European Bank for Reconstruction and Development
The EBRD is acquiring a 35 per cent stake in Cascade Insurance and
Reinsurance Company (CIRCO), a leading insurance company in Armenia,
to help meet the growing demands for insurance in the country. It is
the Bank’s first investment in Armenia’s non-banking financial sector.
The EBRD’s AMD88.4 million ($200,000) investment will help financially
strengthen CIRCO, enabling the company to increase the amount of
risk it can retain that is not reinsured, and continue broadening
its product range, particularly for non-life insurance products
such as motor, cargo and property. The Bank’s investment – which
could increase by up to an additional AMD125 million in the event of
further capital increases by CIRCO – should also help raise values
in the insurance industry by promoting international standards of
best insurance practice.
Kurt Geiger, EBRD Business Group Director for Financial Institutions,
said the project is very important because it will help promote
Armenian financial services to western standards. More and more people
and companies in Armenia are recognising the benefits of insurance,
which is fuelling the growth of the market, Mr Geiger said. By
working with a company committed to Armenia and the development of
its financial products to western standards, we are helping meet that
demand, he added.
Established in 2004, CIRCO offers both commercial and personal
insurance in the non-life and life sectors. While the EBRD will own
just over a third of the company, the remaining shares are owned by
CIRCO’s parent company Cascade Capital Holdings, which in turn is
owned by the Cafesjian Family Foundation, set up in 1996 by Gerard
L Cafesjian, an American of Armenian descent.
The EBRD’s investment in CIRCO is a significant event for the Armenian
insurance sector, said Jonathan Stark, Deputy CEO of Cascade Capital
Holdings. It is also a major step towards Cascade Capital’s goal
to become a financial market leader in Armenia and the Caucasus,
Mr Stark said.
The project forms part of the EBRD’s strategy to support the expansion
and development of the non-bank financial institutions sector, and
particularly insurance, in its countries of operations where this
sector is under-developed. The Bank is one of the largest investors
in Armenia, having invested more than ~@100 million in 23 projects.